I currently am on a program with US Foods where we get some upfront money and a rebate based on volume. There is no set margin schedule or audit rights. Sysco offered that to me, but I've not yet had great success with Sysco. When we do a market basket, they are consistently higher.

We are now on five stores and moving into new states. We will then be dealing with different units within US Foods (or Sysco, or whoever.)

What is the best way / process to get National Account pricing?

I know Coke has a National team that one can often get better pricing than through your local bottler. I would love to figure out how to do this.

Hopefully you have a good relationship with your sales person.If so they can assist you in your endeavors.If you do not have a relationship......you are either going to pay for someone to do this for you or go to a GPO.....( they are all going to take their slice too)

A couple of suggestions. Get written proposals from at least two companies. These should have delivered cost defined in them. Have audit privileges at least twice a year, with the number of items reviewed each time written into the agreement. Be sure that you can negotiate directly with manufacturers and have them give you their true FOB or delivered cost to your supplier, minus program monies. Work up a list of items to have market baskets quoted from each proposal. There will be many other points in the proposals that other folks will suggest here.__________________laser

As a former operator I would never agree to "upfront monies" and a rebate program or a "performance reward". The only way to manage it straight up is to get a "net net" program with category margins over actual cost. Assuming your drop sizes are healthy you have all the leverage assuming you pay on time.

The upfront monies and rebate monies are all built into your margins to ensure the distributor is paying themselves back the money they give you. That is most likely why your market basket is behaving the way it is (you're funding the monies from the prices you pay).

Your top 20 items are the items you spend the most money on so get those on vendor programs/manufacture rebates that do not funnel through the distributor.

1) you have five locations? How many DCs do you currently have? 2) what are the real, and real timing, plans of your growth/expansion?3) do you currently have "high volume" items? Combined value of two full trucks per month? + or - 80k lbs.4) does the menu have a signature aspect? Special protein/salad/flavors/provided soups? Many manufacturers have regional chain development people who may want to participate.

5) Coke - how big is your total geography? An RSM or chain person can speak on behalf of the bottlers, I believe.__________________Statistics are like mini skirts; they give you a good idea but hide a lot of important stuff

Originally Posted by wilsontennis What are the real, and real timing, plans of your growth/expansion?

We have opened or acquired five locations in four years.

We've started slow, still figuring out what we're doing. Landing on bagel/cafe concept. I say we've opened / acquired five stores, but I should mention, we are going to close two of those locations as they are either underperforming (bad location) or are too different than the model we are moving forward.

So let's call it three locations in two states.

Two ten minutes apart. The other is 6 hours.

Quote:

Originally Posted by wilsontennisDo you currently have "high volume" items? Combined value of two full trucks per month? + or - 80k lbs.

I don't think our locations are that big. Our menu is pretty small compared to some, we buy 2000 bags of 50# flour to each commissary (which is located at one of the shops in each state.)

Quote:

Originally Posted by wilsontennisDoes the menu have a signature aspect? Special protein/salad/flavors/provided soups? Many manufacturers have regional chain development people who may want to participate.

No, I don't think so. What does this mean, I don't fully understand.

Quote:

Coke - how big is your total geography? An RSM or chain person can speak on behalf of the bottlers, I believe.

Between the two states, drops will come out of two different bottlers. Again, two of the shops are ten minutes apart.

The rest - so you are three, not five. You have not mentioned the specifics of growth.

DC = Distribution Center

Coke bottlers - can't help.

Stick with the others who have offered support. Don't take upfront money. Why are you in the bagel/café segment? __________________Statistics are like mini skirts; they give you a good idea but hide a lot of important stuff

Einstein's and Noah's haven't exactly set the world on fire. Why do you think your concept will be different?

Flour is your main item. This a low-end item for most distributors. Not a lot of vendor money either. I'm not sure how much warehouse space US Foods or any other distributor is willing to allocate for this. How often do you buy 2,000 bags of flour for your commissary? Once a month? Twice a month?

Personally, I don't think you have the horsepower to negotiate any kind of deal with only five locations and a limited menu. I think you should talk to your USF rep about a net pricing deal, and work with manufacturers directly on volume rebates.__________________The problem with your gene pool, is that there is no lifeguard.

Don't mean to be too blunt, but with 3 locations, you probably shouldn't be buying flour from USF or sysco. A bake supply house will consistently beat their prices on wheat all day long - and you're not doing the kind of volume that you can really beat up Sysco or USF to compete with them - even if they could. Bakery or pizza distributors usually move an order of magnitude more flour than the local broadline DCs do in my experience.

No one wants to sell flour to a bakery account - it's penny margins. A DC generally sells you the flour so they can supply the paper, chemicals, spices, etc. But with an account your size, they're probably pushing a higher margin because they can. Shop around find some independents in your local areas. You'll probably see much better prices - and I think you're getting way ahead of yourself here trying to set up distribution to every zip code in the contiguous US, when you only have 3 active locations thus far.

If you're on a street program, don't go shopping around until your deal is expired. You could be required to pay back a portion of the upfront money if your sales drop or you quit buying from USFoods. Also you may run into problems, when you close your 2 stores if those were built into the agreement.

Originally Posted by CheeseFlourSauceDon't mean to be too blunt, but with 3 locations, you probably shouldn't be buying flour from USF or sysco. A bake supply house will consistently beat their prices on wheat all day long - and you're not doing the kind of volume that you can really beat up Sysco or USF to compete with them - even if they could. Bakery or pizza distributors usually move an order of magnitude more flour than the local broadline DCs do in my experience.

No one wants to sell flour to a bakery account - it's penny margins. A DC generally sells you the flour so they can supply the paper, chemicals, spices, etc. But with an account your size, they're probably pushing a higher margin because they can. Shop around find some independents in your local areas. You'll probably see much better prices - and I think you're getting way ahead of yourself here trying to set up distribution to every zip code in the contiguous US, when you only have 3 active locations thus far.

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